Daimler opens new bus plant in India

In a move it sees as an important milestone for its global activities and the logical progression of its business in India, Daimler’s Daimler India Commercial Vehicles operation has opened a new bus body plant at Oragadam near Chennai in India, a year after the foundation stone was laid. There is major Wrightbus involvement in the project as the Ballymena based manufacturer is providing the bodybuilding expertise.

Hartmut Schick, Head of Daimler Buses, commented at the opening, ‘It will enhance Daimler Buses’ global presence. With sales of €4.2bn (£3.04bn) in 2014, we continue to be the world’s leading bus manufacturer. Expanding our local production capacity will further strengthen our position.’

‘We already have many years of experience in our core markets, where we have set standards in terms of reliability, efficiency, comfort and safety. With this new plant, we are bringing this expertise to India. This will allow our Indian customers to benefit from our technology leadership in the bus sector, as well. While our bus division is just starting out here, Daimler has been present in India for several decades. In fact, we first entered the market in 1950. Since the very beginning, we have aimed to provide customized solutions that serve our Indian customers’ needs. And it’s no different now. In fact, our “Daimler Buses. Best Buses” vision clearly reflects our goal of offering the best mobility solutions for the world. In the years to come, that market will change. India will continue its process of modernisation. Its population will become increasingly urban. And the country’s economy is expected to keep growing rapidly.’

‘All of this means that India’s mobility needs will change, too. The country’s bus market is already growing twice as fast as Western Europe’s. We expect it to be the world’s second largest by 2020. Our investment of around Euros50m (£36.21m) in our local production and sales activities thus makes perfect sense. This new plant is a big step in a process that started in 2013. At the time, we made our Indian bus business part of Daimler India Commercial Vehicles. Today, our production capacity stands at 1,500 buses per year. In the medium-term, we aim to increase it to 4,000 units. This will help us meet growing demand and seize major opportunities in the Indian market.’

‘As we move forward, we will focus on delivering our customers reliable quality at competitive prices. Our objective is clear: we want to set standards in Indian mobility, just as we have in other parts of the world. To do this, we aim to provide complete mobility solutions. Our offer will include robust, comfortable, and safe front and rear engine buses. It will also comprise a comprehensive portfolio of aftersales services.’

‘Ultimately, investing in our Indian activities also strengthens our position in global markets. The products we manufacture here are delivered to customers all over the world. Since 2014, we have already exported more than 150 units from Oragadam to Egypt, and more countries will follow. All of this shows that expanding the Daimler Buses footprint in India is an investment in our future global success. With strong brands, forward-looking products and services, and a motivated global team, we are well positioned to maintain our leadership in the bus industry. In fact, I am confident that we have what it takes to shape the future of mobility – in India and around the world.’

Saying that India’s government is committed to making the industrial sector as successful as the IT sector, Dr. Wolfgang Bernhard, Member of the Board of Management of Daimler AG, responsible for Daimler Trucks & Buses, spoke of the manufacturing sector’s share of Indian GDP increasing from 15% to 25%. ‘When industry grows, the need for transportation grows – both for goods and for people. Over the next ten years experts predict annual sales in India of 400,000 to 500,000 trucks above 6tonnes – that means the market should more than double. By 2020 the market for buses above 8tonnes is expected to double as well. That’s why we made India a priority – and why we are determined to continue to invest in India and to grow in India.’

Partnering Daimler in the venture is Wrightbus, which carried out the research and development the new product range in Northern Ireland with the support of Invest Northern Ireland, part funded by the European Regional Development Fund.

Speaking at the event Mark Nodder, Wrights Group Chairman and CEO, said, ‘India is a huge emerging market with massive potential.  Having a presence on the ground in the territory and a bus range design specifically for the Indian market, will help sustain employment for the current workforce of 130 Wrightbus International employees based at Group headquarters in Northern Ireland. The opening of this assembly plant is a proactive step towards international expansion that will impact positively on Wrights Group performance and the local economy.’

Covering 113,000 square metres, the new factory has an initial capacity of 1,500 vehicles a year, with a target of 4,000. Opening the bus plant will require 140 local employees initially but will eventually create 300 jobs. Local content is 85%.

Hartmut Schick continued, ‘Our two-brand strategy allows us to offer our customers in the region the right products and services for them. The front-engine buses of the BharatBenz brand meet the requirements of the Indian volume market in the school, staff and tourist segments. The British manufacturer Wrightbus mounts extremely light aluminium bodies onto the vehicles directly on Daimler’s plant premises. In the future, Daimler will produce rear-engine buses under the Mercedes-Benz brand in Chennai for the premium segment. These will mainly be used for longer coach trips.’

‘Both the front and rear-engine buses will be available with a gross vehicle weight rating of nine and more than 16tonnes when they go on sale in the fall of 2015. Buses with a gross vehicle weight rating of 16tonnes will be available from next year.’